Safety First

These programs reduce injuries and save money, especially in high-injury industries such as construction and heavy manufacturing.

By Jennifer Juergens

Jun 01, 2004

WHEN a major distributor of tires and wheels wanted to put together a safety incentive program, the call went out to Chip Separk, president and CEO of Recognition Solutions in Raleigh, N.C., who partners with Chicago-based Hinda Incentives. CS Recognition was already doing the service award program for the company.

With more than 1,900 employees and more than 5 million square feet of warehouse space, the company had its share of accidents. Many of the jobs done in the company were loading, unloading, and shipping tires and other equipment, Separk said.

"The president wanted to put together the safety incentive program for its 1,100 warehouse and delivery employees on the East Coast, and then in the second year it was so successful it expanded to include an additional 800 employees from other regions," he said. "Today, there are 1,900 employees enrolled in the safety/attendance program. We proposed a points-based safety awards program that could be redeemed for all kinds of lifestyle awards."

The program was put in place to improve safe work performance (lost time accidents and OSHA recorded incidents). The status quo was affecting the company's bottom line and its ability to meet customer delivery needs. After the first quarter in 2001, the company's vice president of human resources said, "We can tell this is already working." In 2002, more than 90 percent of the employees participating achieved safety and attendance perfection.

Are these results typical? Do safety incentive programs work? Just consider the costs that unsafe practices can have for companies. The simple answer is, it depends primarily on the focus of your safety program and secondarily on how well a company implements its incentive program.

Safety incentive programs are an integral part of reducing worker injuries and in turn save companies big bucks, especially in injury-prone industries such as construction, heavy manufacturing, and chemical processing.

Dave Balducci, president of DMB Consulting, Inc. in La Quinta, Calif., has been helping companies put together safety incentives for more than 15 years. He?s a believer.

"Do I think safety incentives work? I know they work," he said. "When you talk to companies about safety, they don't realize that the actual cost of a single occupational accident can be four to seven times the initial cost. Consider the cost of a doctor's visit. It?s not just the cost of the visit; if your employee is out for a month, for example, you have to pay for a replacement--and pay to train that replacement.

"We did a safety incentive for one company in the petrochemical industry that cut the number of safety incidents from 94 to 48 in the first year," Balducci added. "The company's costs from accidents went from $2.3 million to $1.3 million, and they?ll continue to reduce that for the life of the program."

But, he added, lowering the number of incidents does not always correlate to the lowering their cost: "Even one incident, an oil spill for example, could cost millions."

Focus on the Individual
Putting together a successful incentive starts with your employees. What goals are you trying to achieve? Get your employees' input to pinpoint critical areas of safety the company can improve on. Develop safety procedures and set goals, a set of rules that identifies safe behavior as the best vehicle.

Safety program policy should be broken down by work function and department. "Companies should ask employees for their input when putting together a program," Balducci said. When "safety behavior" is the focus of the incentive program, a collaborative, problem-solving approach involving both management and employees is adopted to identify critical sets of safe and unsafe behaviors. This allows for the creation of incentives for the specific behaviors or sets of behaviors that prevent accidents from occurring in the first place. It significantly reduces the incidences of behaviors that lead to accidents. It also creates a culture of safety.

Next, implement a training program. Safety training is the best way to ensure that your procedures are understood and followed. Then create the incentive program. Set a clear system of rewards based on safety procedures.

Setting Reward Levels
Given that as many as 96 percent of all workplace accidents are triggered by unsafe behavior, it is no wonder the focus often has been on reducing the number of accidents by eliminating unsafe behaviors instead of on preventing accidents by rewarding instances of safe behavior.

Group safety incentives are not as effective, Balducci said, because "No one's going to want to rat out another employee for not following safety rules if doing so will affect the team. That's also why punishment (reprimands, fines, dismissals) are ineffective ways of preventing unsafe behavior. What they do instead is reinforce non-reporting, which increases the likelihood the behavior will occur again--and along with it, the increased risk of injury or accident.

"It's important in the design to really focus on the individual. It should be behavior based and it should be communicated that if employees exhibit safe behavior, costs will go down. Behaviors can be as general as attending safety meetings," he said.

Creating Your Theme
The promotion should have a strong theme, be ongoing, and yet be changed periodically as the program matures. Dave Chittock, president of Cleveland-based Incentra, Inc., put together a program for The Davey Tree Expert Company, tree and lawn care specialists based in Kent, Ohio.

Incentra used Hinda Incentives to provide the program administration and merchandise awards. The quarterly CHIPS Bonus Program compares a territory's achievements in five categories to the same quarter the previous year. If improvements are made, each person in the territory receives a "CHIP."

CHIPS stands for Customer retention; Holding down costs; Improved average customer sale amount; Productivity; and Safety and auto general liability.

While there are territory goals, the safety component is based on individual safety. Each CHIP is worth 500 points toward merchandise in a merchandise catalog. With points-based programs, several incentive programs (safety, attendance, production, quality, cost reduction, etc.) are integrated into one rewards system. This in itself can reduce an incentive budget substantially because the different programs complement one another rather than competing.

Points-based programs provide a high degree of flexibility, allowing employees to be rewarded for even small contributions. Each employee selects the specific rewards that will motivate him, based on what he believes he can achieve.

Under Davey's Safety bonus program, each individual could earn 8,000 to 10,000 points. Last year, more territories achieved a greater number of CHIPS, Chittock said. According to Davey's Kurt Appleman, using vendor-driven administration "makes the program very easy for our employees to utilize, and their customer service department does a good job of handling questions and turning orders around quickly."

Balducci said instant awards also work well. "If a supervisor sees an employee exhibiting tenants of good safety behavior, an on-the-spot award is an excellent way to recognize them."

Involving the Employee's Family
While some companies customize their awards in catalogs that support safety, "Employees get sick of a safety kit for the trunk," Balducci said. "I believe in non-cash incentives and merchandise. I also believe in a paper-based catalog as well as an online catalog. Send the catalog home so the family can get excited about it. Send it along with the letter from the chairman of the company and a brochure on the rules."

While some companies resist doing an incentive program, feeling as though they already are paying their employees a salary to be safe, Balducci said companies that use incentives create a loyal following. "It's kind of like the company is putting their money where their mouth is," he said.

And there is an added benefit to offering a safety incentive: "Employees tend to be more safety-conscious overall. One guy bought helmets for bicycle riding home for his kids, while another swept the berries from his sidewalk because he thought someone might slip on them."

Support from upper management is key, he said: "If you don't have it, forget about running a safety incentive."

The most motivational rewards are ones the recipient can pick out ahead of time and set as her own personal goal. It needs to be something she can see or visualize, something she would not normally purchase for herself or her family. Once she has it, she has something she can be proud of (the concept of trophy value), Balducci said.

Don't forget the most important and least expensive reward of all: recognition. All of us like be recognized for our accomplishments. You can triple the value of a reward item by presenting it to the recipient in front of a group of his peers. It not only motivates the person receiving the award; it also motivates others to want the same recognition.

This article originally appeared in the June 2004 issue of Occupational Health & Safety.